At the beginning of the current week, relatively older and new deals were reported in Turkey’s import scrap market, ex-US scrap prices remained stable at $370/mt CFR, while ex-Europe HMS I/II 80:20 scrap prices increased slightly.
The negative mood has intensified in Turkey’s import scrap market ahead of the SteelOrbis Fall 2024 Conference & 91st IREPAS Meeting to be held on September 15-17 in Paris. Market sources believe that both buyers and sellers are waiting to meet face to face at the conference in order to conclude further deals. According to market sources, Turkey will need to conclude deals in the coming days for at least 12-15 deep sea cargoes for October shipment. The IREPAS event is considered to be an ideal opportunity to negotiate deals. One European scrap seller commented on September 12 that the mood in the market is negative, but that there is no room for a price decline on their side due to their collection prices. A Belgium-based export yard has bought HMS I/II at €300/mt DAP, HMS I/II 70:30 scrap at €310/mt DAP and bonus grade at €320/mt DAP. An Amsterdam-based scrap exporter paid €297.5/mt DAP for HMS I/II, according to one source. Germany-based sources also report that the local scrap purchase prices have dropped in the EU by €30-35/mt. “After this drop, domestic prices are now in tandem with exports. Scrap flow has recovered slightly,” a sub-collector added.
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap prices in CFR terms have moved up by 0.27 percent week on week. The prices are now 1.21 percent lower month on month in the deep sea segment, with prices in the range of $366-370/mt CFR.
US domestic scrap prices in the Northeast for September settled sideways versus August on solid demand for US export scrap. US scrap prices in the Ohio Valley settled sideways to $20/gt ($20/mt) less versus August settled prices amid the continued softness of hot rolled coil prices. US ferrous scrap pricing for the month of October is seen sideways to higher, because supply remains tight at local scrap collection points, and fewer US mills are expected to be offline for maintenance during October, resulting in improved demand from mills for scrap inputs, market insiders told SteelOrbis this week. Market contacts added that ongoing low demand for finished products such as appliances and automobiles, due to the ongoing US economic malaise, has reduced manufacturing activity, lowering the amount of available prime grade scrap normally available from Tier I/II manufacturers.
SteelOrbis has learned that the current price for Mexican domestic shredded scrap has declined by MXN 350/mt ($17/mt) over the past week to MXN 7,000/mt ($349/mt). Additionally, HMS I/II scrap prices have decreased by MXN 300/mt ($15/mt) over the same period to MXN 5,350/mt ($266/mt).
This week, the local Italian scrap market has remained essentially unchanged. According to sources, raw material prices may have bottomed out and should remain at the current levels considering that the international markets also seem to be rather stable.
However, the balance between supply and demand, both at minimum levels, is extremely delicate according to the sources. Prices could drop if further production cuts occur, but, if demand improves even a little, prices would immediately rise because there is a shortage of raw material. An official at a steel mill said there is still room for a downward correction of scrap prices, adding, “We have no orders and further production cuts may be necessary to cope with the situation and regain competitiveness.”
The local Spanish scrap market lost another €15-20/mt this week due to low demand for scrap from producers. Market participants think that prices have bottomed out and some expect a €5/mt recovery next week.
The Kanto scrap export tender in Japan this week closed with a significant price reduction, down a total of $25/mt as compared to the price level recorded last month. The sharp reduction observed in the Japanese yen-based price was not fully reflected in the dollar-based price since the Japanese yen has gained strength against the US dollar over the past month. In the Kanto export tender, the highest bid was at JPY 42,720/mt FAS, JPY 5,236/mt lower than last month. Despite the decline achieved in the Japanese yen price, the dollar-based price decreased from $327/mt to $302/mt FAS, taking into account the change in the Japanese yen-US dollar exchange rate.
The leading Japanese EAF steel producer Tokyo Steel continued to cut its domestic scrap prices this week. On September 9, SteelOrbis calculated that its H2 scrap prices have declined by JPY 7,000-8,500/mt in total or $13-21/mt as compared to late June. However, the decline on dollar-basis has been limited due to the appreciation of the Japanese yen against the US dollar from $1 = JPY 160.35 to $1 = JPY 143.67 since June. On September 11, the total drop in Tokyo Steel’s H2 grade scrap prices were JPY 2,800-3,500/mt as compared to August 30.
On September 13, Tokyo Steel’s general range for H2 grade scrap was announced at JPY 40,000-42,000/mt ($289-298/mt) depending on the asset, effective as of September 14.
Domestic steel demand in Vietnam has declined over the past week, exerting pressure on raw material prices. Offers for Japanese H2 scrap to Vietnam have declined by another $5/mt over the past week and are now at $350-355/mt CFR. Ex-US bulk HMS I/II 80:20 scrap offer prices have also declined, falling on the upper end by $5/mt to $365/mt CFR Vietnam.
Sentiment in Taiwan’s import scrap market has been very pessimistic this week, market sources have told SteelOrbis. The domestic rebar market is “completely silent” especially amid the price drop observed in the Kanto scrap export tender in Japan, the price cuts announced by Tokyo Steel, and Taiwanese producer Feng Hsin’s announcement of lower scrap purchase prices. Offers for ex-US HMS I/II (80:20) scrap in containers have declined by $1-3/mt over the past week to $320-327/mt CFR. Offers for Japanese H1/2 (50:50) scrap bulk are now at $329-340/mt CFR, declining sharply from $345/mt CFR recorded last week.